Some Colorado agencies slow to fix problems flagged by auditors

Audits tell bureaucracies how to get the most out of taxpayers' money, and for four years in Colorado they have been the backbone of a law aimed at making government leaner and more efficient.

But despite the 2010 SMART Government Act, which ties budgets to performance, agencies still fail at a significant rate to follow the solutions they agreed to.

The law was intended, in part, to urge agencies to follow the recommendations to fix problems cited in audits, but the number of unresolved issues has risen from 234 in 2010 to 260 last year.

The compliance rate is 85 percent, but from 2007 to 2009 — before the new law went into effect — annual compliance ranged from 87 percent to 90 percent.

Legislative leaders can't point to a single example of any agency's budget being trimmed as the result of a damning audit.

Millions of dollars could be at stake.

The Office of State Auditor can't credibly put a dollar value on fixes that haven't been made, but they can track those that do occur. Since 2008, recommendations that have been adopted have saved taxpayers $33.7 million.

Advertisement

"It's not a little thing when you do an audit," said Sen. Kent Lambert, R-Colorado Springs, a member of the Joint Budget Committee and a leading voice for leaner spending and efficient service. "Each one of these audits costs taxpayers $150,000 — even though the audit can save a lot more than that — so we need to make sure agencies follow their audit recommendations. They can't just go on."

Proponents of SMART, which stands for State Measurement for Accountable, Responsive and Transparent government, say to give it time.

"We're still working on the process," said state Sen. Lois Tochtrop, D-Thornton, a Legislative Audit Committee member. "It's starting to work."

The way the law works now is that each agency's audit, good or bad, goes to the legislative committee that the department answers to, and legislators can use that information as they see fit.

"Prior to the SMART act, it was just the Legislative Audit Committee that heard the problems auditors found," Tochtrop said. "People would come in and be like, 'Oh, we don't really care; we're going to continue to do whatever we want.' And that was it. Now they're starting to understand there's a lot more eyes on them."

Free lunches

Agency leaders still sit before the Legislative Audit Committee at the moment their audits are made public. In 99 percent of the cases, they agree with the findings and to a timetable to make the changes, according to auditors' records.

They often tell the committee that changes are well underway.

That was the case Jan. 28, when an audit told legislators how the school-meals program for needy children missed out on $2.2 million in federal reimbursement and nutrition grants between 2009 and 2012. Auditors blamed lax management.

In a recent interview, Department of Education spokeswoman Janelle Asmus and state school nutrition supervisor Jane Brand said most of the auditors' findings are already being addressed.

The audit cites 20 steps in six areas that should help fix the issues. The department replied that six have been implemented, another one is scheduled for completion in March, six more in April and the rest either later this year or as late as June 2015, according to the timetable the program submitted to auditors.

State Auditor Dianne Ray said that often agencies promise more than they reasonably accomplish.

"In some cases, department heads come to us and say, 'Well, we told you we would make that change by this March, but it's actually going to be next March,' " she said.

Agencies that fail to use the solutions they have agreed to, however, "need to be focused on," she said.

Neither Asmus nor Brand expected the program to lose money as a result of the audit. The $175 million program gets almost $171 million from federal sources.

"Every dollar that gets cut affects the program," Brand said.

Legislative leaders in both parties said they are willing to bail out the Colorado State Fair, even though an audit last month showed the event continues to lose money, as audits have shown for a decade.

The fair lost $2.8 million last year, and the deficit has grown so deep that expenses and debts are nearly $614,000 more than the fair's total assets.

Auditors recommended cutting operations and reassessing ticket prices "immediately," as well as seek money from the legislature to stay afloat.

Colorado taxpayers already pony up about $2 million a year in state and local subsides, up from $1.1 million a decade ago.

Good audits

As a show of progress Tochtrop said the Department of Human Services was once perceived as the worst offender for disregarding audits. Since Reggie Bicha became the agency's executive director in 2011, the department has become one of the most responsive, she said.

Last February, Bicha urged an audit of Human Services' vocational rehabilitation program after he suspected he wasn't getting straight answers from those directly in charge of training the disabled to find jobs.

The result was a withering assessment delivered by auditors in December. Tochtrop called it "the worst audit I've ever seen."

Auditors found "concerns" in 98 percent of the cases they reviewed, including poor management, little or no oversight on spending, and a lack of understanding by managers and staff of the laws that govern the program.

Money was spent on expenses such as parties, a tent and a computer that a client traded for a laptop computer. Some clients were allowed to stay in the program indefinitely without progress, while others were on long waiting lists, the audit found.

Auditor Jenny Page told legislators that the program had been the subject of critical audits in the past and that no substantiative changes were made.

Six months before December's audit was made public, division director Nancy Smith either was fired or resigned. Bicha introduced the new leaders he brought in to clean up the mess.

In 2010, the year before Bicha began the cleanup, Human Services had 127 unused or unfinished recommendations. As of last June, the number was down to 20, and Bicha said the rest of the fixes have since been made.

He said the vocational rehabilitation audit was "painful to hear," but it was necessary to find solutions.

"At DHS, we believe the taxpayers depend on us to do things that make these programs run as effectively and as efficiently as possible," Bicha said.

"We owe it to the taxpayers to make the best use of their resources, regardless of what it takes to do that. That's our job."

"Hard to violate"

House Speaker Mark Ferrandino, D-Denver, sponsored the SMART act four years ago.

He bristled at the suggestion that legislators and agencies are violating his law by withholding budget cuts from stubbornly poor performers.

"It's a law that's kind of hard to violate," he said.

The act doesn't specify penalties or deadlines for solutions, only that legislators tie budgeting to performance.

"A lot of it is very nuanced," Ferrandino said.

He said often legislators learn that a program needs more staff and money to fix the issues.

"If the audit recommendations show you have a problem ... and we cut its budget, that probably means they're not ever going to be able to solve the problems," Ferrandino said.

"In the real world, if you're not doing things efficiently, your competition will take you out," he said. "Fear of competition is an incentive to do it right. In government, there is no incentive. Your incentive is to spend all you get, so you can get more next time.

"One of the few tools we have to make government accountable for what it spends is audits. If they're brushing the audits aside, and there's no enforcement, then we've lost that tool. Taxpayers should be upset — it's their money."

ODESSA, Texas (AP) — A West Texas man has been charged with impersonating an officer by using sirens and flashing lights to skip to the head of the drive-thru line at a fast-food restaurant. Full Story

Sufjan Stevens, "Carrie & Lowell" (Asthmatic Kitty) Plucked strings and pulsing keyboards dominate the distinctive arrangements on Sufjan Stevens' latest album, and in the absence of a rhythm section, they serve to keep time. Full Story